"Hot Gas" Lawsuit to Move Forward

Plaintiff groups in the “hot gas” Multi-District Litigation (“MDL”) will be allowed to proceed with their case after a federal judge in Kansas denied the defendant oil companies’ motion to dismiss for failure to state a claim. The MDL was formed to address the issue of fuel expansion in warm weather. (For background see previously published story in the December issue of The Energy Law Advisor which can be found in the Advisor Archive).

Plaintiffs alleged, among other things, that selling fuel by volume without taking into account energy output is an unfair or deceptive trade practice. The defendant oil companies point out that each state’s regulations require that gas be sold by the volume, and there is nothing deceptive about selling gas in conformity with the law. They also rely heavily on the industry standard of selling fuel by the gallon, as evidenced by the specifications laid out by the National Institute of Standards and Technology. However, the judge ruled that the claims alleged were plausible on their face, and that the oil companies had not proved that any of the state’s regulations precluded the claims, and had not disproved that consumers buying the gas were being deceived. The judge pointed out that while some of the arguments asserted by the defendants were persuasive, they did not establish as a matter of law that plaintiffs could not recover.

For now at least, the plaintiff groups’ claims have survived. Thus, their next step will be to attempt to certify an enormous class of warm-climate gasoline consumers.